Phoenix Footwear Group, Inc. earned $440,000, or 5 cents per share, in the first quarter, rebounding from a loss of $3.0 million for the first quarter of 2009.
Loss from continuing operations of $683,000 compared to a loss of $2.7 million for the first quarter of 2009.
Net sales of $5.9 million which included increases of 20% and 4% for Trotters and SoftWalk, respectively. In aggregate, sales decreased by 3% compared to the first quarter of 2009.
Funded bank debt balance of $2.9 million at the close of the first quarter, which remained flat compared to the close of the fourth quarter of 2009.
For the quarter ended April 3, 2010, net sales totaled $5.9 million compared to $6.1 million in the prior year comparative period. Included in the prior period revenue was $707,000 of closeout sales attributable to previously discontinued styles of H.S.Trask. For the current quarter, sales of Trotters increased by 20%, sales of SoftWalk increased by 4% while sales of Trask decreased by 75%.
Russell Hall, President and Chief Executive Officer, commented, “We are pleased to report strong sales growth in both of our core brands. Trotters and SoftWalk have experienced increases and solid sell-through in most all of our channels of distribution. Our plans for H.S. Trask are very modest for the year so the sales decrease in this brand was not unplanned. During the quarter we also continued to line up new customers, opening up 57 new or former accounts, including reestablishing our brands with key influential retailers such as Orva in Manhattan and Littles of Pittsburgh, Pa., who have had past success with our core brands.”
Gross profit was $2.1 million for the quarter, flat compared to the prior year's comparable quarter. Gross margin improved to 35%, a one percentage point increase from the first quarter of 2009 and a four percentage point increase from the most recent quarter. Selling, general and administrative expenses, or SG&A, totaled $2.7 million, a decrease of 29% compared to $3.8 million in the first quarter of 2009. SG&A as a percentage of net sales was 46% for the first quarter of 2010 compared to 62% in the prior year comparative period.
In the first quarter, our net income totaled $440,000. Operating loss from continuing operations for the quarter totaled $614,000 compared to an operating loss of $2.7 million in the prior year comparative period.
Hall concluded, “We have made steady progress towards a return to profitability. While we still have work to do, we have been able to deliver growth in our two core brands and based upon our future bookings, we expect that trend to continue. The steady addition of new customers, combined with our growth in assortment with our key accounts underscores our focus. We will continue aggressively managing our margins and costs as we look to improve our performance.”
Other Events
Recently, the Worker, Homeownership and Business Assistance Act of 2009 was enacted, which provides for an election for federal taxpayers to increase the carry back period for an applicable net operating loss to 3, 4 or 5 years. Accordingly, the company received a refund of approximately $2.0 million from the Internal Revenue Service in the first quarter of fiscal 2010.
